PMS is used by the Portfolio Manager and is responsible for the following:
Responsibilities
- Creating Parent Orders (P₁, P₂, … Pₙ)
- Pre- and post-compliance checks
- Rebalancing (target vs actual weights)
- Weights are Percentage Allocation by (could be sector, industry, region, country, risk profile, etc.)
- Track specific indices (e.g.
MSCIindices, depends on fund criteria)
- Settlements by checking for projected cash
- Before a Parent Order is created, PMS checks projected cash to ensure sufficient funds
- Also receives Fills back from the OMS
Parent Order Lifecycle
- PM sets target weights
- PMS computes delta between target and current positions
- Compliance check run on the proposed Parent Orders
- Cash availability verified
- Parent Orders sent downstream to OMS
- Parent Orders updated from Child Order status and Positions & Cash reconciled